Western Price Survey
February 7, 2014
An Arctic blast across the West this week sent energy prices soaring in response to the frigid cold.
Western peak-power prices started the week strong, with most hubs around $70/MWh, then surged past $200 and $300/MWh midweek as snowstorms hit the Northwest and Sierra Nevadas, and cold blanketed the East. Gas prices in the West also soared, with some hubs hitting as much as $35/MMBtu during the week, far outpacing Henry Hub spot prices, which stayed below $8/MMBtu.
Cal-ISO issued a Flex Alert Thursday, saying some of its natural gas plants in Southern California were impacted by operational flow orders restricting the amount of gas they could use. Imports of power to Cal-ISO also remained low during the week as other balancing authorities coped with higher energy use (see "Power Gauge," next page).
By week's end power and gas prices at Western hubs had fallen back but were still strong, with peak power averaging around $70/MWh at all hubs except Palo Verde, where prices were around $60.
Working gas in storage reached 1,923 Bcf as of Friday, Jan. 31, according to U.S. Energy Information Administration estimates, a net decrease of 262 Bcf from the previous week. Storage levels are now 28.8 percent less than a year ago and 22.4 percent less than the five-year average.
The Western region saw a 26 Bcf withdrawal during the agency's report period, which is in line with its five-year range despite record-high withdrawals.
Peak demand on the Cal-ISO grid reached 29,924 MW Feb. 3, which should be the week's high. Northwest Power Pool demand reached 66,331 MW Feb. 6, which should be the week's high.
Energy prices throughout the West last month reached higher than in January 2012, with both power and natural gas prices up significantly (see "Price Trends," next page).
Water Outlook: Observed precipitation at the Columbia River above The Dalles is 6.4 inches for the water year to date, or about 50 percent of normal, according to the Northwest River Forecast Center. There was little change in The Dalles' seasonal observed precipitation since early January, says Joanne Salerno, senior hydrologist with the forecast center. The Upper Columbia River snowpack is now near to below normal.
California statewide snow-water equivalent made a tiny gain, up 6 percent to 16 percent of normal as of Feb. 7, according to the California Department of Water Resources' Doug Carlson. Although there has been some precipitation, he says, the ground is so very dry that it is all absorbed, leaving no runoff [Linda Dailey Paulson].
Archives of the Western Price Survey for the past year are also available online.
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